Tag Archives: airborne

What keeps Victoria’s Avalon Airshow airborne?

Posted February 22, 2013 15:35:01

Say the word Airshow, and many will think of fatal fireballs and terrifyingly close calls as stunt pilots ply their trade.

Fingers’ crossed, a Royal Australian Air Force Hercules shooting fireworks-like flares next week is the closest the 2013 Avalon Airshow comes to that stereotype.

Rather, that is the “2013 Australian International Airshow and Aerospace & Defence Exposition.”

“The thing about Avalon is that it really is two concurrent events,” Airshow Chef Executive Ian Honnery tells the ABC.

He speaks in short bursts, interrupted by a commentator describing the airliner-like comforts of the McDonnell-Douglas C-17A Globemaster Military Transport plane that roars overhead.

Mr Honnery continues; “Avalon is a major public aviation spectacular, and at the same time, it’s an international aerospace and defence aviation exposition.”

Meanwhile, the commentator informs us that the C-17 has two bedrooms and fully functioning toilets onboard, in case you were wondering.

The behemoth plane, capable of carrying 70 tonnes of cargo, is undoubtedly impressive.

The commentator is joined by RAAF Air Commodore David Pietsch.

Air Commodore Pietsch regales the assembled crowd with a tale of how an American C-17A was able to land, fully laden with earthmoving equipment, on a rough, unprepared patch of desert in Afghanistan. It then disgorged its cargo, allowing the machines to then plough a smoother airstrip for future operations.

Quite a feat no doubt, although hardly the sort of acrobatics display that is likely to draw the punters to an airshow. So why are the assembled scribes being told this?

Back to CEO Ian Honnery, and his two-shows-in-one explanation. “On the exposition side of it, what you have is six days of trade exhibitions – 600 exhibitors from 21 countries, 75 military and commercial delegations, 21 conferences and symposiums,” he explains.

The flags adorning the numerous marquees surrounding the tarmac sport a number of the aviation and defence contractors: Boeing, Northrop Grumman & Thales to name a few.

The purpose, he says, is simple.

“It’s not so much the deals that get done at an event like this, it’s the introductions and the networking that takes place,” he says.

“It’s important that Australian companies in particular are introduced to the internationals, and this is a great opportunity to do that, without the expense of going overseas.”

Victoria’s Aviation Minister, Gordon Rich-Phillips, has been on stage spruiking the benefits of the airshow to the local economy including $150 million in 2011 and $20 million for Geelong.

He has also announced that the show’s tenure has been expended. It will now continue, every other year, until 2025.

But it has hardly been a positive few years for Australian manufacturing. If the defence industry is driving this show, how secure is its future?

“There’s an old saying,” Ian Honnery begins, when asked that question. “When times are good, you should promote yourself. When times are bad, you have to promote yourself.”

He delivers his final line with a polished pause that suggests he has reeled it off a few times before. “We take Australia to the world by bringing the world to Australia,” he smiles.

Next week at the airshow, there will be acrobats walking on the wings of flying planes, stunt pilots, fireworks and 300-plus planes on display.

All set then, to attract the expected 195,000 visitors. But by the time they arrive, the show’s real purpose will be largely complete.

Topics: air-transport, air-force, event, vic, geelong-3220

How long can Google’s shares stay airborne?

How long can Google’s shares stay airborne? | GulfNews.com Skip To Navigation Skip To Content

New York/San Francisco: Googleshares have clung tenaciously near record highs after a three-month, 30 per cent rally fueled by rising optimism about Internet advertising, but Wall Street fears it may be running out of steam.

Google stock has hovered near an all-time high of $774.38 since touching that peak on October 5.

To break through that level, investors and analysts say it needs to run a gauntlet of risks that could undermine its status as technology’s second-most valuable company.

The most immediate concerns center on competition in the mobile arena, which is shaping up as the main battleground for tech supremacy among Google, Amazon.com, Microsoft , Apple and Facebook.

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Investors point out that Google’s Android — despite being the world’s most-used mobile software — has yet to yield significant revenue growth. And the company has not yet articulated a coherent strategy in the wake of its $12.5 billion (Dh45 billion) acquisition in May of cellphone maker Motorola Mobility.

In the longer term, a rising wave of regulatory scrutiny both at home and abroad could represent the single biggest risk to the Google story. Regulators are looking into whether Google is competing unfairly by favouring its own properties in its core search product, and whether it inappropriately uses sensitive personal data to target ads.

To be sure, of 45 investment brokerages that cover Google, 36 rate it a “buy” or “strong buy,” with the median price target standing at $845 — up another 12 per cent from current levels — and the most bullish target at $910.

Among portfolio managers, at least one maintains a $1,300 target, after factoring in Google’s growing cash and securities pile.

“Their business model alone makes them an incredibly easy target for a whole bunch of legal matters,” said Kim Forrest, an analyst and portfolio manager at Fort Pitt Capital Group who recently owned Google shares.

“To date they’ve done well managing it,” Forrest said, referring to Google’s interactions with regulators. “But I think it’s their big risk. Most investors don’t fully understand that, professionals as well as retail.”

Anti-trust anxieties

Google’s run-ins with regulators over the years have invited comparisons to Microsoft and IBM, two tech giants that were once distracted and constrained by long-running anti-trust battles.

“They seem to be well-positioned in display ads and mobile, which are nascent industries,” said Connor Browne, portfolio manager of the Thornburg Value Fund.

“The biggest risk by far is regulators bringing an antitrust case, a la the Microsoft Internet Explorer suit that company faced.

“Our expectations are nothing material for the stock, but that could be one of the reasons why the valuation is not higher now.”

Sources told Reuters last week that a majority of commissioners at the US Federal Trade Commission was poised to recommend, possibly as early as November, that the government bring an anti-trust lawsuit against Google.

Several companies, including Yelp have accused Google of tilting its search algorithm so that links to its own subsidiaries appear more often in its search results. Google processes two-thirds of all internet queries in the United States and roughly 90 per cent in Europe.

But analogies to previous anti-trust cases may be off-base, analysts say.

The FTC is not likely to demand actions nearly as dramatic as the forced breakup of telecom giant AT&T in 1984, but the constant threat of anti-trust investigations “makes it a more highly scrutinised company and therefore they need to tread more carefully than others,” said Colin Sebastian, an analyst at Robert W. Baird & Co.

“It becomes a perception issue” that could affect how aggressively Google tweaks its search algorithms, he added.

High barThe bar for anti-trust enforcement remains high. Regulators must show that aside from stifling competitors, Google’s actions hurt consumers. Even if the FTC proceeds against the company, it is unlikely to try to alter its strategy of developing the Google+ social network, as well as its Maps and consumer review products, into a comprehensive, searchable database of people and businesses, analysts say. Rather, it is likely to press the company to disclose which search results are generated from Google properties, or seek other tweaks that the company has seemed willing to make, analysts say.

“It’s miles from Microsoft,” said David Balto, a former FTC policy director and anti-trust lawyer.

“It would be fruitless to try to identify any consumer harm comparable to what Microsoft engaged in.”

More critical may be the search giant’s regular entanglements with privacy regulators, especially in Europe. Google, like Yahoo and Facebook, relies on the ability to track users while they surf the web as an essential driver of its advertising business.

This week, European Union authorities threatened Google with fines unless it amended its privacy policy after the company consolidated user data across its products, like Gmail and Google Plus, to better target advertising.

The risk is that it could get ensnared in complex, pan-global privacy investigations that hamper its ability to collect user data.

“Privacy is the bigger risk,” said Sebastian, the Baird analyst.

“If Google were not allowed to target advertising, that would hurt monetisation. It’s a headline risk that can cause choppiness in the stock.”

By the numbersGoogle itself has been clear that its biggest priority for now is the mobile device battle with Apple, which Executive Chairman Eric Schmidt called the “defining fight” of the high-tech industry.

The Android operating system accounts for 56 per cent of the market, according to Strategy Analytics, but it is losing share to one-time partner Apple, which surged from 23.2 per cent market share in the second quarter of 2012 to 33.2 per cent a year later on the back of strong sales of its iPhone 4S.

And the deal for Motorola, its largest-ever acquisition, will remain under scrutiny until the division can turn a profit.

“It seems like every new business they’ve gone into has diluted their net income. Shareholders would like to know how they’re going to get paid,” said Forrest, who expects Google’s recent share gains to level out for the rest of the year.

“The biggest beneficiary of people adopting Android is Microsoft, because they get paid an $8 licence [per device] for their patents.”

Cost per clickSome, however, see a lot to like in Google’s prospects.

The company dominates search, and processes a full two-thirds of all internet queries in the United States.

Google also seems well-positioned to adjust to a sweeping change in consumer behavior that is afflicting its peers. People are spending increasing time on their smartphones and tablets, but advertising rates on mobile devices command only 56 to 71 per cent the price of ads — or “cost per click” — on laptops and PCs, according to an Adobe Systems study.

Google appeared to suffer a blip in the second quarter, when it reported a 16 per cent decline in its search ads’ “cost per click” compared with a year ago, but analysts say the long-term forecast for Google’s mobile transition remains upbeat.

With the help of its AdMob acquisition, completed last year, and the rise of video advertising on its YouTube platform, Google seems well-positioned.

Rising advertising rates for mobile searches and earnings growth rates of over 20 percent over the next two years could make the company’s shares worth $1,300 in 2014, assuming a 15 times earnings multiple and factoring in cash, argued Browne, who owns shares in his $2.1 billion Thornburg Value fund.

He said desktop searches should account for about 70 percent of Google’s total ad revenue, followed by display ads at 15 percent and mobile searches at 10 percent.

“We give them zero credit for Motorola, assuming no big profits and no big losses,” he said.

While his estimate is not as lofty, Paul Meeks, an analyst at Saturna Capital who covers technology for the $2.2 billion Amana Growth Fund, said shares of Google should trade at $854, a 13 percent jump from Wednesday’s closing price of $755.49. He arrived at that price by assuming a 15 multiple on next year’s projected earnings of $49 a share – a tad above Wall Street’s current average expectations – and adding in $113 per share based on the company’s large cash position.

“This is a company that starts with essentially a monopolist position in desktop search, and now through Android they are capturing more than half of the mobile ad revenue dollars,” Meeks said.

But other investors in the company are preparing to pare back or sell their positions after the recent run-up.

“The stock is more fairly valued now than it was when we picked it up in the fourth quarter of last year,” said Daniel Morris, who manages the $4.3 million Manor Growth fund. Google needs to show that it can wring profit from its growing number of searches for the stock in order to move higher, he said.

The stock also tends to rise and fall with an advertising market that is in turn tied to investor sentiment, said Steve Sorrano, equities analyst for Calvert Investments. He said that latecomers might not want to jump on the investor bandwagon right now.

“It’s easy to get hurt if you own that stock too late in the cycle,” he said. – Reuters

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